The xenophobes are in full cry against the sale of Lochinver Station, because the buyers are a Chinese company. Never do we hear a peep against Harvard University buying farms.

You would think these farms are owned by the Government. They are not. They are owned by a private company, selling to another private company. Labour, NZ First and the Conservatives would all ban the current owner from being able to sell to the highest bidder. Now let us look at what that means, as reported by Stuff:

Lochinver Station’s current owner, the Stevenson Group, said farming was no longer part of its core business and proceeds from the sale would be used to kick-start its South Drury industrial development.

Stevenson Group chief executive Mark Franklin said the South Drury project could employ up to 8000 people.

So the current owner does not want to invest in the farm land. They want to sell the farm land so they can invest in south Drury – a project that could employ 8,000 people. This is what Labour, NZ First and Conservatives are battling against. They would have you forget the farms have a current owner who should be able to get the best price for the farms, so they can invest that money elsewhere in the NZ economy.

Gary Romano, the Auckland-based chief executive of Pengxin International, said the furore over the sale, which is conditional on Overseas Investment Office (OIO) approval, was surprising.

‘‘Clearly I’m disappointed. Here’s a piece of land, it’s a nice piece of land, but it is underdeveloped. We’ll sit on our credentials with what we’ve done on the other farms,’’ he said.

Pengxin bought 16 farms, covering about 8000 hectares, in the collapsed Crafar group in 2012 for $200m.

The central North Island Lochinver Station comprises 13,800 hectares, but Romano said of that only 9500 hectares were currently viable farmland and Pengxin would look to improve grass pastures.

Romano said Pengxin were prepared to make a ‘‘very significant investment’’ in the property to improve its environmental, community and productivity profile.

Unwilling to quantify how much Pengxin was planning to spend on Lochinver, Romano said its application to the OIO included plans to fence and undertake planting on streams leading to Pouarua Lake and eradicate wild pines and gorse.

Constructing a publicly-available underpass on the Taupo-Napier highway, and committing to keep employing all 20 staff working the property was also Pengxin’s intention, Romano said.

And you have the new owner, if approved, wanting to invest in the farmland, to make it more productive. This will result in more tax being paid in NZ.

This is how private business works. The buyer sees greater value in the asset than the seller, so they do a deal where both win. The buyer gets the asset they want, to invest in, and the seller gets cash to invest in other assets. The net winner is New Zealand – and that is the test the Overseas Investment Office is legislated to apply.

Labour, Conservatives and NZ First (Greens are against also, but they seem to be against all farms regardless of who owns them) would have a policy where the current owner is banned from selling to whom they would like – regardless of the net benefit to New Zealand. That’s stupid. Sales should be decided on a case by case basis, with criteria being net benefit to New Zealand.

Incidentally the average amount of land sold to foreign buyers in the last five years has been 390 square kms a year. In the last term of the Labour/NZ First Government an average of 762 square kms a year was sold.

Also note that it is not just one way investment. Fonterra owns* half a dozen farms in China. They have around 15,000 cows, employ 500 staff, and produce 150 million litres of milk a year – with the profit all flowing back to NZ. If you start to get racist and demand China can’t invest in NZ, then logically China should ban NZ investment in China.

* – Fonterra does not own the land, but has a long-term lease for the land. This is because *no-one* in China owns land – it is all the property of the Chinese Government. But Fonterra is able to purchase use of the land in much the same way a Chinese company can.

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This entry was posted on Tuesday, August 5th, 2014 at 11:00 am and is filed under NZ Politics.
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It would be nice if David Rutherford, the NZ Chief Human Rights Commissioner, were to intervene (in the way that Devoy jumped on Jamie Whyte) to assert the UN Charter on Human Rights on behalf of the private land owners.

The Australians have no problem doing that. So, Mr Rutherford, get off your backside and weigh into the argument (or are you chicken?) :

*** “.. 3. Property rights

“Arguably the most forgotten of all human rights is property. Of all the forgotten freedoms I talk about, property rights appears to be the one that attracts the most response. Yet it should be utterly uncontroversial. Article 17 of the Universal Declaration of Human Rights states that ‘everyone has the right to own property alone as well as in association with others’ and ‘no one shall be arbitrarily deprived of his property’.

“Property rights are not just about physical property. Property rights are about people’s ownership of their own bodies, the use of physical property and land and intellectual property. Property rights are not just important for the sense of security they provide. The freedom of exercising property rights underpins our entire market economy.

“Property rights underpin attracting foreign investment. Capital is a reflection of property. It’s also essential to attract capital for housing development – an issue I understand is also very ‘hot’ in New Zealand, particularly as a result of the Christchurch earthquakes.

“However, the biggest frontiers around the full realisation of property are in the personal ¬domain. If people own their own bodies then what role is there for government to tell them what they can do with it? People’s ownership of their bodies poses serious questions, and difficult answers, about how we can end our own life, and the degree of bodily autonomy we have to take risks and live with the consequences.” – Tim Wilson, Commissioner for Human Rights, The Commonwealth of Australia, Wellington. July 1, 2014.

“The xenophobes are in full cry against the sale of Lochinver Station, because the buyers are a Chinese company.”

Actually, a company set up by Chinese communist government cronies. Dictators who rule by terror and murder and silencing dissent and are buying influence throughout the west at the same time as they carry out a massive military buildup and engage in belligerency towards Australia and other democratic nations (like Taiwan).

Does this matter at all to Helen Key and the National Party?

How does the National Party feel about the people and companies from the allied countries who engaged with businesses run by major supporters of Germany’s Nazi Party before WWII?

A few of the hysterics here should actually try reading OIO decisions and the terms on which foreigners get to buy farm land (in particular). Access by the public is mandated which previously did not exist when owned by NZers for instance. This is just part of the ebb and flow. I remember the same hysteria in the US when it looked liked the Japs were buying all the buildings. Didn’t end well for the Japs, was good for the vendors.

Bottom line, go and buy a farm and don’t sell it to foreigners. Don’t sell your house to one. Your call. But to claim ownership rights in someone else’s land is just communism.

“Arguably the most forgotten of all human rights is property. Of all the forgotten freedoms I talk about, property rights appears to be the one that attracts the most response. Yet it should be utterly uncontroversial. Article 17 of the Universal Declaration of Human Rights states that ‘everyone has the right to own property alone as well as in association with others’ and ‘no one shall be arbitrarily deprived of his property’.

Mr Rutherford is obviously too busy trying to address the theft that is taxation.

Bottom line, go and buy a farm and don’t sell it to foreigners. Don’t sell your house to one. Your call. But to claim ownership rights in someone else’s land is just communism.

Absolutely correct. NZ First, The Conservatives and Labour have a communist policy preventing such sales. That’s a truism. They think we should have the same law as communist China.

I was talking to a real estate agent last night who was a tad concerned about Chinese buyers of residential property in Auckland. I told him that he had a duty to his vendors to get the best possible price and if a Chinese buyer is offering $250K more than a NZ buyer, he can’t make his vendor $250K poorer. That $250K is then reinvested in NZ somewhere so it’s not “lost”; in fact it is a gain to the NZ economy. I’m utterly shocked Colin Craig can’t see that!!

For a brief period in the late 1930s and 1940s, Adolf Hitler managed to redefine and personify evil in a way that even ancient mass-murderers such as Tamerlane and Genghis Khan never aspired to. By virtue of Hitler taking complete control of the most powerful country on the European continent, practically every existing business entity in Germany thus became a de facto instrument of this new and tyrannical government. At that time, doing business in Germany meant supporting Hitler, so it’s not fair to frame all these businesses as enthusuastic Nazi collaborators. While some of these businesses exist and flourish today, it’s likely that millions of their customers have no idea of these companies’ past dealings with the Nazi party.

If you cannot see the paralell with modern day Communist China you’re wilfully blind.

Someone should point out to the Stevenson Group and other vendors that they will be worse off to the tune of millions of dollars if those parties get elected in September. And NZ will have 000’s fewer jobs.

There weren’t any cries of shame when Tamati Coffey sold his Auckland villa for three times its value.
As a private seller he got the best price he could.
I wonder the ethnicity of the purchaser?
I wonder if he would donate the CGT equivalent to charity?
I wonder if he is a hypocrite?

Maybe someone who thinks there is no problem with the Chinese buying our arable land could enlighten me: do the Chinese buy similar properties in the US, in the UK, in South Africa, in Australia, in Canada?
Or anywhere in Europe ?

AT A meeting of South-East Asian nations in 2010, China’s foreign minister Yang Jiechi, facing a barrage of complaints about his country’s behaviour in the region, blurted out the sort of thing polite leaders usually prefer to leave unsaid. “China is a big country,” he pointed out, “and other countries are small countries and that is just a fact.” Indeed it is, and China is big not merely in terms of territory and population, but also military might. Its Communist Party is presiding over the world’s largest military build-up. And that is just a fact, too—one which the rest of the world is having to come to terms with.

Maybe someone who thinks there is no problem with the Chinese buying our arable land could enlighten me: do the Chinese buy similar properties in the US, in the UK, in South Africa, in Australia, in Canada?
Or anywhere in Europe ?

The election is being held in NZ. I don’t particularly care what China does or doesn’t do in Luxembourg.

For the record, I remain totally opposed to any western engagement with China until there is a commitment from them to democratic government. I do not care what the economic cost is. We should not trade with thugs murderers and tyrants who rule by terror.

There weren’t any cries of shame when Tamati Coffey sold his Auckland
*****

THAT IS A sliced tee shot….

The fact is that it was not that he got a good price, it was the hypocrisy of the labour/red melon position on Auckland housing costs, which if on the hurdy gurdy are fine, but bloody awful for those coming from out of town.

Offshore German, Canadian, British, Australian, American and Italian, individuals, companies, pension funds and consortiums all own farm and forestry land in NZ. Strangely the Conservatives, NZFirst, The Greens and Labour don’t get upset if it’s these nationalities- only if it’s Chinese. How very curious. I wonder what the reason could be? It’s a word of thinking of and it starts with R…..

The detail is in the FTA we have with the Chicoms. Under this FTA, these companies can bring up to 20000 (if I recall correctly) Chinese nationals to work on the farms and in the processing factories, they can ship the products straight back to China or anywhere else without even exchanging currency, they can even bring in everything from fertilizer to fencing wire direct from their own suppliers if they want, bypassing the entire New Zealand supply chain.

The Chicoms are playing a long game and they will eventually end up eating out lunch. But at this point in time it is more of an opportunity for the “socially liberal Right” to wear their racial virtue on their sleeves and demonstrate to anyone who’s prepared to look that they are not “xenophobic”.

The sellers, Stevenson Group are a construction, engineering and mining firm. Understandably they want to get out of agriculture it’s not really their bag so to speak.
More than likely they will also get round to selling their farms at Huntly and Drury which are sited around one of their quarries.
Lochinver station is run as a sheep and beef unit so the Chinese buyer might be planning to run it for meat production which is I think the first time the Chinese have moved into this area of production in NZ. If they do it will be interesting to see if they plan building their own meat processing operation here or if they approach the big farmer co-ops in NZ. This could be the massive injection of capital and market access to China the NZ meat industry needs.
If the Chinese are planning a diary conversion however it will be a challenge since Lochinver stations natural soil fertility is low to medium and is cobalt and selenium deficient. Heavy and expensive use of fert would be required to maintain feed levels for cowherds of suitable size to justify the cost.
Whatever they do decide the Chinese will be spending serious money for many years and employing locals in this country to develop their asset and make it pay. This is not a bad thing.

Under reciprocity, the Chinese interests, undoubtedly linked with Chinese Communist oligarchs, should be allowed only to lease in NZ.

DPF brands those who question sale of our land to foreigners xenophobes. Federated Farmers have said they are uneasy about the Lochinver deal – are they xenophobes, too?

Presumably, the Brazilians who have declared their country’s land to be a strategic asset to control a buying surge by Chinese, Middle East and American investors, are xenophobes.

Presumably, China, which has all but shut out all foreign investment in what it considers its core strategic industry – steel – is xenophobic.

Presumably, John Key was xenophobic four years ago when he said he didn’t want NZ’ers to become tenants in their own land and he would look at changes in assessment of NZ land sales to foreigners (link follows):

Here is my problem with the argument that we should allow a chinese corporate to own large tracts of NZ farmland. NZ citizens and corporates are not afforded the same rights in China. I have no problem with foreign citizens and or corporates buying land in New Zealand but only if NZrs are afforded reciprocal rights in the country of origin of the investor. Too often we have dropped our strides for being afraid of offending foreigners from countries who have no difficulties in telling NZ investors to get fucked in their country.

Of course, NZers in Canberra can only lease land, they can’t buy it. Therefore logically no Australians should be allowed to buy land in NZ, but only lease it. See the problem with that statement?

Some countries or jurisdictions have different rules around ownership than NZ – they allow 99 year leases, but the land itself is owned by the govt. Canberra is also one of those places. Yes, it sucks for the people who live in those places, but that’s the way it is. And in those places, a 99 year lease is treated as if it were ownership – so saying “but we can’t buy land in Canberra” makes no real sense.

I still don’t understand how anybody could think that China will “buy all our farmland” and then we’ll somehow starve or be forced into penal colonies. China can’t vote. China’s taking all the risk here – any time NZers feel like it we can just pass a law that expropriates all that land and distributes it to locals. Logically we’d do that after taking all their money, not before, because once we do that we’ll have trouble selling our milk to China (i.e. we’d want to get rich first).

Sure, if we did that China might invade us (actually, they don’t yet have the capability to do that). But realistically, if we were worried about that then we should be worried about them invading just because. And certainly if that’s our worry you’d wonder why we’ve been running down our military. Perhaps now’s the time to tell Abbott that we’d like a guided missile destroyer, so he can keep the production line open for one more ship? (At a knock down rate of course – because it fixes a political problem for him and gives us an actual useful military asset)

A similar debate is being conducted in Australia, particularly about foreign direct investment in agricultural land.

And some of that debate is about investment from sovereign wealth funds (which are govt controlled) and whether they may have wider aims (such as controlling all the elements in a supply chain – or even political aims).

Trade treaties had an extra layer of complexity.

The Australian (FIRB) restrictions are seen as more restrictive than NZ – although the reality may be that they have had longer experience and more developed criteria for evaluating proposals. The current Aussie govt is setting lower thresholds – for those proposals that require consent. It is not clear that this will result in fewer purchases.

However, even in an economy with much greater access to capital than NZ, Australian policy recognises the economic benefits of foreign investment (access to capital and access to new technology, opportunities & links to global supply chains).

It seems that the policy development in Oz, particularly to deal with public concerns about agriculture, will see greater transparency in the regulatory machinery as well as a national register of land and water assets (and their foreign ownership).

I expect that we will follow the Australian lead – whilst seeking to retain the benefits of foreign investment to build capacity.

An election is never a great time to decide long-term policy. This election perhaps more so than most. And, depending on your point of view, Lochinver may not be a great case study (a trophy property that probably does not cover its cost of capital in its present format – and will require significant investment to move parts of it into dairying). But at least its better than debating what may be happening at Huka Lodge. So I never thought I would say it, but perhaps Colin Craig has done us a favour.

jackinabox —it was a private business. the vendors have said the spoke to a large number of interested parties. they also said it was not necessarily the highest bid they were after , but some one who would retain workers etc.

It is strange the opponents to these sales do not complain about the large pension/investment funds owning large forestry blocks so they can exploit the ETS system ( I the Havard Uni pension/investment is involved or was involved). NZ gets not benefit at all from that.

But Jack5, NZers cannot buy land in Canberra / the ACT. The point stands, some jurisdictions have 99 year leases, others have ownership. The two are generally treated as being equivalent in accounting terms, particularly if the lease doesn’t have rights of review on rental price (in Canberra for example, there is almost no rental, just rates). No idea what the situation is in China.

The key is usually that locals and foreigners be treated equally. If China treats NZers equally with locals in buying land, then we should do the same. If it happens that “buying land” in China actually means “99 year lease” then that’s what we get.

“Radman (134 comments) says:
August 5th, 2014 at 11:40 am
Bottom line, go and buy a farm and don’t sell it to foreigners. Don’t sell your house to one. Your call. But to claim ownership rights in someone else’s land is just communism.
Absolutely correct. NZ First, The Conservatives and Labour have a communist policy preventing such sales. That’s a truism. They think we should have the same law as communist China.
I was talking to a real estate agent last night who was a tad concerned about Chinese buyers of residential property in Auckland. I told him that he had a duty to his vendors to get the best possible price and if a Chinese buyer is offering $250K more than a NZ buyer, he can’t make his vendor $250K poorer. That $250K is then reinvested in NZ somewhere so it’s not “lost”; in fact it is a gain to the NZ economy. I’m utterly shocked Colin Craig can’t see that!!”

Hmm, but it’s not quite like that, is it. In either case the foreign buyer is looking to make a return on their investment, not a loss. In the case of a rental property, the return has to be greater than, at the very least, cost of finance plus cost of maintenance plus cost of rates and insurance. So the rent has to reflect that and it goes back to the foreign buyer’s home country, and as such it is a net loss to NZ. If he sells, the capital gain likewise exits stage left.
Farms are the same. They have to run, at the very least, a profit over and above the costs associated with purchase and ownership, and those profits are expatriated by the foreign owner. So they are a net loss to NZ as well.
On top of that there is no guarantee that the seller won’t just take the $250K you mention and disappear to the Gold Coast with it. Or Hong Kong. Either of which could in fact be home for him. Even if he does “invest the difference” in NZ, over time, and not much of it, that difference will be eaten up by the stream of revenue leaving the country. And of course ownership remains gone as well.
It is just a net loss to NZ. There is no gain under any circumstance.

I have yet to see one, just one single xenophobe, demonstrate how 10, 20 50, 100+ H’s of land, can be shipped to a foreign destination. The diggers, brief cases, and ships would never be big enough, you crackpots.

Opponents, including risk aversion politicians, are dumbass shits.

Grow up you bloody fools, and wake up to what any Parliament can do (unless the likes of Dotslob are able to direct politicians ).

It’s what’s created on that land, flipper. But I’m sure you knew that, because the “they can’t very well take the land away” argument is far too glib for your usually well-reasoned contributions.

China is a totalitarian Communist regime, riddled with corruption. The only comparable nation on earth is North Korea, but they don’t have that capacity to start World War III if they don’t get their own way. A capacity they’re constantly, and aggressively expanding. Japan has just provided Vietnam with increased sea defences, for instance, and is gravely concerned at Chinese territorial aggression:

But perhaps these other Asian countries are just racists against… well, Asians. And perhaps that well-known lefty mouthpiece The Economist is just xenophobic when it describes China’s internal power struggles, to see who gets to sit atop the castle of corruption that is that country’s government, whereas it usually champions foreign investment:

Mr Xi has already moved away from the older model of consensus-based rule in which the top handful of leaders shared responsibility and decision-making authority. He has asserted his authority as the sole head of numerous policy “leading groups” of the sort that once had multiple bosses. By taking down Mr Zhou’s cronies and, as is widely expected, Mr Zhou himself, he will control the state-security network as well as the armed forces.

Perhaps the biggest drawback is what all of this says to the general populace. Convincing people that he is determined to root out corruption at all levels is one thing. But it is hard for Mr Xi to do it without appearing to admit what everybody already knows: that the system itself is rotten to the core.

Perhaps the US, Japan, Vietnam, Australia, Indonesia and everyone else that views China with increasing alarm and suspicion are “dumbass shits” and you and the other commenters who wait to welcome our new Chinese overlords (see, I can do hyperbole too) are the only ones that have it right. Perhaps.

Or perhaps China is like no other country in terms of its abilities and ambitions and needs to be viewed with extreme caution.

For the record, I’m equally opposed to Harvard and the rest of them, on principle. But I – and many other observers – am alarmed by China in a way that no other nation engenders.

Richard,
One of the neighbouring properties is already in dairying. I am sure this property would be used to expand the dairy operations of the new owners.
There are some environmental concerns around this with the head waters of some major rivers nearby and some claiming that there is already contamination showing up from current dairying .

I am sure I heard that Landcorp would be engaged to run the farm so we have a government buying a farm that will be run by a government agent.

I don’t know if anyone is on this thread any more but the bottom line here is not that we’re selling our land to all and sundry, it’s why we are having to do that.

The debate isn’t around Lochinvar; we’ve been selling our farms for years & it will continue along with our housing stock; the debate is, why can’t kiwis afford to buy them? Even the local Maoris don’t have enough to buy it and they get given money for free.

The fact is, New Zealanders are on the bones of their arses. Private debt to banks who get their capital from overseas lenders is utterly colossal, and when you add government debt to that, we’re already f***ed. It’s not a matter of if we will be tenants in our own land, it’s when.

This government in yet another example of it’s shortsightedness, can’t see the problems this has the potential to cause.

What happens for example if Helen Key/Nat Lab (delete where appropriate) continue with their social re-engineering of NZ and 20 years from now the Chinese were to make up say 25% of the population.

Imagine by then Helen Key has continued on his current path and borrowed so much money that the economy has collapsed and defaulted on our debt.

Imagine now we get a rabble-rouser like Winston Peters, but worse in power, who blames all of our problems on the Chinese who have made us tenants in our own country due to 20 more years of selling of prime agricultural farmland just to prove we’re not “xenophobic”.

Imagine now that the Chinese authorities are rightly concerned that their farmland is being threatened and her citizens attacked (New Zealand is still a country that allows dual passports). It doesn’t take a leap of imagination to see the Chinese sending in the PLA to New Zealand to “keep the peace”.

Think that sounds far-fetched? Just take a look around the world right now and remember, geo-politics doesn’t stay frozen in time and what sounds far-fetched now may become reality in the future.

You would think these farms are owned by the Government. They are not. They are owned by a private company, selling to another private company. Labour, NZ First and the Conservatives would all ban the current owner from being able to sell to the highest bidder. Now let us look at what that means, as reported by Stuff:
………
It sounds like you are making a caste iron case except that those rules don’t apply across borders: that is a political decision. There is an economic value in being the member of a nation. The price of land should reflect the fundamentals of the local economy not the wealth of overseas buyers.

If you owned it (that Taupo station) why should I, or the Government, or any other party, be able to tell you what to do with your property?

Well then, if I buy some land in Australia, and that land (as much of it does here in the north) has a mine-able quantity of uranium under it, you’ll have no problem if I dig it up and sell it to my good friend Kim Jong-Un, then?

And if your neighbour decides to make use of his land by opening a brothel / all-night karaoke bar, I take it you won’t be complaining?

Or would you argue that governments have the right to limit what people can do with the land they own, in the interests of the nation as a whole and of certain groups?

The name on paper argument is simple. And it is stupid xenophobia, but may be Wainui Rex, you are still tarred with that brush.

What on earth Wainui has to do with your argument, I don’t know. But it does support mine. The vast majority of Wainui residents co-existed happily alongside the rapid influx of Samoan and Tongan immigrants when they arrived to work in the Bata, Brugger Industries, Griffins and other manufacturing operations that once provided close to full employment for the valley. There was no whiff of xenophobia because those people settled there, contributed to the community (in both the local and broader sense) and clearly wanted to make NZ their home.

Incidentally the average amount of land sold to foreign buyers in the last five years has been 390 square kms a year. In the last term of the Labour/NZ First Government an average of 762 square kms a year was sold.
………..
sounds like an alcoholic saying “you drank 4 bottles of whisky a night. I only drink 3″ to a reformed alcoholic.

If you owned it (that Taupo station) why should I, or the Government, or any other party, be able to tell you what to do with your property?
….

“When the sacredness of property is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property. No man made the land: it is the inheritance of the whole species.”
–
“The land of Ireland, the land of every country, belongs to the people of that country.”

J.S Mill

Property Council chief executive Connal Townsend said debate about the future ownership of the 16 Crafar dairy farms appeared to have tapped a racist vein, when the real issue was New Zealand’s willingness to value its own landholdings and provide certainty to people who can commit capital, generate local employment, and encourage economic growth.

What a large number of people don’t realise is that if someone buys prime agricultural land, we can’t force them to sell us the food from that land.

We should be selling the food, not the farm.

Also, shouldn’t food security be an issue for our political elites who warn us constantly that “global warming/climate change” (delete as appropriate) is going to be causing droughts, food shortages, floods and general apocalypse now if we don’t pay more taxes?

Yep. The Australians are awake to this. NZ is not… or is being wilfully misled. The Australian government commissioned its Chief Scientist to report on the issue back in 2010. The report concludes:

For Australia, food security is inextricably linked to the political stability of our region and has the potential to affect our national security. Food security also affects our status as a premier food exporting nation and the health and wellbeing of our population.

It notes that:

The likelihood of a food crisis directly affecting the Australian population may appear remote given that we have enjoyed cheap, safe and high quality food for many decades [but w]e are now facing a complex array of intersecting challenges which threaten the stability of our food production, consumption and trade.

And that in a country which is claimed to currently produce enough food to feed three times its population.

It doesn’t make specific recommendations for or against the sale of productive land to foreigners, but the report does say the government should formulate:

A National Land Use Planning Framework based on a landscape perspective, developed in conjunction with state and territory governments to secure future food production.

NZ’s government, in contrast, seems a little too “relaxed” about the issue…

OK, so for argument’s sake, let’s imagine we ban selling farmland to foreigners. Now imagine I (as a farmer who owns some farmland) want to get top dollar for my land. Can I instead:
1. Gain an agreement from a Chinese company to lease my land with a fixed rental for 99 years
2. Sell the land to a special purpose company
3. Finance the company with a loan from a (foreign) bank that is secured over the value of my lease contract

Net effect, I have the cash same as if I sold the land, and foreigners have both a mortgage over the land and effective operational control of the land. But would everyone on this thread feel better?

So if the Chinese government buys up NZ’s dairying capacity and then says at some point in the future (as it would have every right to) “sorry, but all the milk and cheese we’re producing is needed to feed the rising middle class back home” you’ll be okay with coffee whitener and imported Cheez Whizz, then?

Crikey has begun mapping the recent purchases of prime Australian farmland by overseas interests (click the image to view the map)

Ausbuy CEO Lynne Wilkinson says the issue of food security is paramount to the rest of the world and should also be to Australia.

She says there have been many recent instances, including the sale of over 100,000 hectares of farmland in Western Australia to the Arab States, which show the Foreign Investment Review Board (FIRB) and the ACCC are not looking after Australia’s long term security interests.

“When countries buy our land it raises issues of sovereign risk, and in our grab for cash we lose the intellectual property of generations of Australian farmers,” she told Crikey. “We cannot guarantee the food grown on this land will stay in Australia or that the profits from exports will be here.”

Entrepreneur Dick Smith says he has “no doubt” there has been an increase in foreign-controlled companies buying up local agricultural properties. Smith has recently been advocated a push to a more sustainable level of economic growth.

“What people don’t realise is that if someone buys prime agricultural land, we can’t force them to sell us the food from that land,” he told Crikey. “They can ship the food form the land directly to their country and I think that should be looked at.”

Excellent question. For my part, the difference between a lease and a sale is both psychological and legal. I rent my apartment. As such I can do quite a bit with it, but am bound by more strictures than if I owned it. I went into that with my eyes open, so I’m not going to throw a tantrum* if I get told I can’t knock out the walls and make it open plan. And if I did (throw a tantrum) no one would support me.

However if I’d bought it I’d have every right, and probably gain quite a bit of support for my right to do so. We could of course impose the same strictures on property owners, but I’d rather not. Assuming you qualify to own a piece of NZ then you should be able to do with it as you wish.

The issue then becomes what qualifies one to own land. And in my view no one who isn’t born in NZ or who isn’t going to be a (mostly) resident part of the NZ community should be able to own part of that community, whether they’re Shania Twain** or a front company for the Communists in Beijing.

* And I don’t hold a substantial nuclear arsenal, which has even the US worried, with which I can get my own way, either.

** I might be tempted to make an exception for Twain, but only if she promised to never, ever, make another recording.

Seriously, China is not going to nuke NZ if we decide we don’t like what they’re doing with farms in NZ.

For argument’s sake, I think we still have a meat board? So by law you cannot sell meat overseas from a NZ farm other than through the meat board. Yet Chinese people seem happy to buy NZ meat farms. We could restore Fonterra’s monopoly if we wanted, it wouldn’t be inconsistent with our other rules. Would that make people happy on food security? Would it matter whether we did it today, or just reserved the right to do it in future? Because we already have that right.

I think people are mixing up lots of things, many of which have nothing in common:
1. China might direct all produce from the farms to China, to NZ’s detriment. Firstly, many NZ producers would love to have markets in China, this is a profit opportunity. Secondly, NZ can at any time pass laws on our food security if we want to, and China won’t get to vote.

2. They will stop us doing xyz on the land. Except they can’t, NZ can at any time pass laws to do as we wish with that land or put restrictions on that land, and as others have noted, we usually get better public access covenants in foreign sales than local ones.

3. They will employ dirty foreigners to work on the land. Newsflash, people already do this, including NZ farmers. Because too many locals don’t like hard work (more accurately, hard work with shitty hours for low wages, but you get the idea). This is nothing to do with land sales, it has to do with immigration and work visa rules.

4. They will send all profits offshore. Well, yes, that’s the point. But in return, they’ll give the person they bought the land off lots of money, and that person will buy something else, and the profits from that something else end up in NZ. In order for everything to balance with the foreign exchange, sooner or later NZers end up owning something overseas. If your argument is that Chinese are smart and NZers are dumb, so the Chinese will end up making more profits than whatever the NZers bought instead….well, I’m pretty sure that’s not a reason for regulation. (And my personal view is almost the opposite, it’s well known that the Chinese are accepting very low returns on real assets because they’re paranoid about the govt taking their China resident money – so it’s more likely that NZers will get paid over the odds for their land and make more money in whatever they invest in instead. Sounds like a win-win to me)

5. They will fail to meet environmental standards / some other standards that good honest NZers would never do. Yeah, like the Crafar farms, which were a model operation before being sold. The reality is that corporate farmers are much more likely to meet environmental standards than small farmers – sure, most farmers meet the standards, but I’ll bet you the dodgy ones are disproportionately small operations who get into trouble and “cut corners”.

6. With all I’ve said above, if we exercised any of those rights, sovereign risk. Yes, and I wouldn’t recommend exercising those options, but the fact remains we could. If we block land sales, that’s also sovereign risk. So we could have real sovereign risk right now, that pisses off one of our largest trading partners (as compared to them investing here and opening new markets to make us wealthy). Or we could reserve our right to have sovereign risk at some time in the future, if and only if it proves necessary. Kinda obvious which way we’d go?

7. But the Chinese have nukes / massive army / are belligerent. Yes, all true. And that is a global concern, and NZ over the last 20+ years has acted as if it isn’t, including shitting on some of our biggest alliances, and pretending that we don’t need to invest in defence. Seriously, now is not the time to start worrying about China, that was some time ago. The Australians have known this for years, that’s why their force posture is all geared to China, and why they want submarines with enough range to get to China and enough stealth to keep the Chinese scared. Plausible deterrence. NZ of course hasn’t decided to maintain the relationships where someone would do those things for us if we were threatened, and hasn’t invested in any capability of our own. If this is our real worry, then how about investing in serious hardware of our own, perhaps stationed in Australia and jointly managed (we could never go it on our own). An air warfare destroyer, or a submarine. Better still a few jet fighters, but seems probably too late for that one.

In short, I don’t think any of the arguments stand up to serious scrutiny, notwithstanding that 94% of NZers when asked in the street without thinking for more than 5 seconds would say “no, don’t do that”. (And that’s another reason not to have binding referendums)

simple. And it is stupid xenophobia, but may be Wainui Rex, you are still tarred with that brush.

What on earth Wainui has to do with
****

Let me put it this way Rex. Wainui is your home town. I know you better than you might ever imagine.
I know you split with Winniepoo, but have nothing personal against you. I believe, however, you obviously caught his xenophobic land ownership disease.

I repeat: Anyone with a brain knows that 99% of the arguments opposing property owners rights are just screwed in the head.

Hmmm, putting aside the economic argument and the right of a private property owner to be able to sell to who he likes to, I think maybe not enough consideration has gone into the concerns raised by those opposing the selling of farmland to the Chinese.

I read cries of racism and xenophobia but I think this is probably somewhat of a red herring. While comparisons are made to the lack of opposition to land sales to Western nations, what is absent is the comparison to non-Chinese Asian nations.

Why only the Chinese? I think the concerns from those who are opposing the land sales are not against the Chinese (a race of people), but rather against China (a country). What I mean is that China (the country) is clearly on the way to becoming a global superpower. Their wealth, power and influence has skyrocketed over the past 20 years and this is well documented. The perception then (misguided or not) is that China is taking over, and this is what is really being resisted.

It’s not an opposition to race per se, but rather to the threat of a flourishing and unpredictable China, one that could lead to NZ being marginalised, and hence the land sales opponents concerns.